The Key to Raising Prices

"This is the year to raise your prices!" That was the message conveyed by a seasoned executive at an industry conference I attended a few years ago. While my colleagues at the event embraced the idea, my partners back at the office had serious concerns about the impact on client retention and the potential of damaging our reputation.

So, why did my colleagues, many of whom were competitors, see an opportunity to raise prices, when my partners strongly disagreed?

My conference colleagues had the benefit of seeing the entire presentation. The conference leader had previously demonstrated many industry advancements over recent years that have created greater value for our clients, while noting fees have not increased. Since clients pay for value not services, there has become an imbalance in the value provided and the fees recovered. So, the message wasn't to arbitrarily raise prices, but that it is time to make sure prices align with the value being provided.

However, it is first important to understand who sets that value. I used to provide a variety of additional services in my proposals to boost what I considered was the value to the client. The problem was that these were services that I valued. Eventually, I realized that my perspective wasn't always the same as the client's, and I was often spending unnecessary time on tasks that had little value to the customer.

To successfully raise prices, a consultant needs to increase the value of their services from the client's standpoint. The most crucial step in this process is to truly understand the target audience's perspective. Once a consultant has adopted the client's viewpoint, there are various techniques that can be employed to optimize both current and future pricing strategies.

1. Offering Enhanced Value. To effectively provide value-added services requires an understanding of what matters most to the client on various levels. Below are some basic approaches:

• Identify Core Client Goals: Deeply understand the clients' goals, priorities, and pain points in order to tailor offerings to align with their unique needs.

• Optimizing Project Factors: Focusing on improving processes that impact essential project components such as schedule, budget or document quality can be seen as value-added.

• Offering Complementary Services: Expanding the scope of services with complementary offerings that resonate with the client and deliver tangible benefits that exceed the costs can create a considerable benefit for the client to consider.

2. Changing Perception. Occasionally, clients may not fully grasp the value of a consultant's services. These scenarios require a skillful approach that emphasizes the value proposition:

• Client-Centric Sales: Shifting the consultant's mindset from "selling services" to "helping clients achieve their goals" is the basis for a client centric approach.

• Empathy and Communication: Demonstrating a genuine interest in a client's personal success and career will help establish a trusted connection that will foster greater confidence in the consultant's value proposition.

3. Regular Assessment and Adaptation. In today's dynamic business environment, it's crucial to continuously review services and pricing structure. A yearly assessment will ensure offerings remain aligned with client expectations and industry standards.

The big picture perspective of the conference speaker was correct. Consultants are continually developing new techniques to offer greater value to the industry. It was easy for my partners to overlook small advancements over a period of time. However, these small advancements add up to major changes. Therefore, to raise prices it is vital to recognize increases in value from the client's point-of-view, align pricing structures and be able to effectively communicate the value proposition.